Italy’s Financial Department and U.S. fund KKR have just signed a joint agreement that could redefine the future of Telecom Italia’s (TIM) fixed-access network and submarine cable unit Sparkle. The cabinet approved two decrees on Monday, allowing Italy’s Ministry of Economy and Finance to take a 15-20% stake in NetCo, a venture between TIM and KKR.
The agreement, which would result in a minority stake for the Ministry worth a maximum of 2.2 billion euros, allows the Treasury to submit a binding offer together with KKR and other Italian investors. Treasury already has a major influence on TIM, controlling state lender Cassa Depositi e Prestiti (CDP) which has a 60% stake in Open Fiber, another major competitor of TIM.
Related: Italian Minister Welcomes Single National Telecom If Competition Preserved
When asked about the implications of this agreement, Economy Minister Giancarlo Giorgetti reassured the public that the Treasury is looking to the country’s Antitrust body to make sure that this deal does not harm competition, advising “CDP, an existing TIM shareholder, could play a role in the reshaping of TIM ‘in compliance with antitrust constraints'”.
The joint takeover of Telecom Italia’s grid by Italy’s Treasury and U.S. fund KKR is set to shape the future of Telecom Italia’s fixed-access network and submarine cable unit Sparkle. With the Treasury looking to assure the country’s Anti-trust body that this agreement does not harm competition, only time will tell exactly how this deal will affect the market.
Source: Reuters
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